HDB Housing Grants guide 2019 -Higher grants and higher income ceiling limit

Higher grants and higher income limit for HDB purchase from Sep 11. 

Applicants for HDB gets a boost with higher grants, higher wage ceilings and removal of restrictions on the type and location of flats being bought. This would be especially beneficial to first time home buyers and buyers who are priced out of HDB option with their wages. It may also be a boon for those looking to start a family with more affordable housing options.

HDB Income Ceiling

The income ceiling for couples and singles for various HDB schemes and executive condominiums have been raised. With HDB flats going for as much as $1 million or more in some estates, this would be necessary to sustain the price. Furthermore, private properties prices had skyrocketed. A 2 bedroom in the East with a size smaller than HDB could cost north of $1 million, making purchases of private property a challenge, especially for young couples, looking to start a family.

Housing Type	Before	After
HDB Flats	$12,000 (Families) Singles ($6000)	$14,000 (Families) $7.000 (Singles)
Executive Condo	$14,000	$16,000

Grants for First-Timers

Previously those buying HDB for the first time could utilise the following grants. CPF Housing Grant (Family Grant) $50,000, Additional Housing Grant (AHG) up to $40,000 and Special CPF Housing Grant (SHG) up to $40000. Those buying BTO may be eligible for AHG and SHG.

From 11 Sep 2019, AHG and SHG will combine to the new Enhanced CPF Housing Grant (FHG) to $80,000. This will be eligible to buyers regardless if it is a new or resale flat.  There is no restriction to the choice of flat and location while previously it was limited to 4 room or smaller flats in non-mature estates. The income ceiling for grants has been raised as well.

Before - AHG and CHG	After - EHG
New Flats Up to $40,000 AHG – Income Ceiling $5000 Up to $40,000 SHG for 4 room or smaller flat Income Ceiling $8500 Resale Flats (up to $120,000 grants) $50000 CPF Housing Grant (Family Grant) Income Ceiling $12,000 Up to $40,000 AHG, Income Ceiling $5000 Non-Mature Estate $30,000 Proximity Housing Grant	New Flats Up to $80,000 EHG for any flat and estate Income Ceiling - $9000 Resale Flats (up to $160,000 grants) $50000 CPF Housing Grant (Family Grant) Income Ceiling $14,000 Up to $80,000 EHG, Income Ceiling $9,000 No Restriction on size and location $30,000 Proximity Housing Grant

The most important factor is that grants will be given to those with higher income ceiling. A family with an income of $5500 and looking to buy a 4room flat in a mature estate would not enjoy AHG and SHG grant in the past. Under EHG, they will qualify for a $40,000 grant, compared with no grant under previous policies.

The new EHG will benefit lower-income as well as the sandwich generation. Previously, the latter would not enjoy these benefits due to the income ceiling.

EHG Grant Amount (Source HDB)

Average household income over 12 months	EHG Amount
Not more than $1500	$80,000
$1500 to $2000	$75,000
$2001 to $2500	$70,000
$2501 to $3000	$65,000
$3001 to $3500	$60,000
$3501 to $4000	$55,000
$4001 to $4500	$50,000
$4501 to $5000	$45,000
$5001 to $5500	$40,000
$5501 to $6000	$35,000
$6001 to $6500	$30,000
$6501 to $7000	$25,000
$7001 to $7500	$20,000
$7501 to $8000	$15,000
$8001 to $8500	$10,000
$8501 to $9000	$5,000

The caveat for EHG grant is that flats must have sufficient least to cover the youngest buyer and/or spouse to age 95 to qualify or full EHG. Otherwise, the EHG will be prorated.

Impact of Policy

Sandwich generation – Those that earn more but not quite enough would stand to benefit from the new changes. Not only are they given an opportunity to qualify HDB flats, they also stand a chance for grants due to the higher income ceiling.

Prices of resale flats – Price of resale flats for those with 75 years lease remaining will get a boost from these subsidies. Look out for a near term uptick in price. Hopefully, the potential price increase would not diminish the impact of grants.

Alongside with changes over the years which include shorter waiting times of 2.5 years from 3-4 years and application of grants from age 21, the changes would allow young couples to plan for families at a much earlier stage. Let’s see if this would have a knock-on impact on fertility rates in the future.

Given that this might be an election year, policy changes are usually met with a wary eye. Nonetheless, this is a step in the right direction to address the needs of the masses including the much-forgotten sandwich generation.